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Speaker 1: Welcome to the Property Pendulum, brought to you by Domain

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Speaker 1: and Fear and Greed. The podcast it tells you which

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Speaker 1: way the property market is going to swing and how

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Speaker 1: to make the most of it. I'm Michael Thompson and

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Speaker 1: I'm joined by Alice Staltz, national property editor at Domain

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Speaker 1: and one of Australia's foremost experts on all things real estate.

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Speaker 1: Of course known to audience is right around the country

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Speaker 1: for her work on nine including the Block. Hi Alice, Hi, Michael,

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Speaker 1: Alice question for you pretty much without notice when you

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Speaker 1: are scrolling through, when you are looking at property listings,

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Speaker 1: when you're browsing through, and I know that we both

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Speaker 1: do this like it's kind of comes with the job,

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Speaker 1: but it's also a personal fascination, isn't it is? It

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Speaker 1: is great to see price guides when you are scrolling through.

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Speaker 1: It just kind of tells you exactly what kind of

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Speaker 1: people are expecting. But it is not uncommon to see

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Speaker 1: a few other phrases there when you're looking at different

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Speaker 1: listings and you see expressions of interest or you see

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Speaker 1: price on application, all those kinds of things, And as

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Speaker 1: frustrating as it might be for buyers, sellers often have

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Speaker 1: a good reason for doing this, don't they? What is

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Speaker 1: that reason?

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Speaker 2: It's a real bugbear of mine. Let's just step back,

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Speaker 2: I guess and understand. There are some legal guidelines around

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Speaker 2: what has to happen state to state. So in states

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Speaker 2: like Victoria, for example, the consumer law is that agents

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Speaker 2: have to provide a price guide for a property that's

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Speaker 2: on the market, So they have to have a range,

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Speaker 2: and the range might be one point one to one

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Speaker 2: point two million dollars for example, and that will be

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Speaker 2: based on comparable sales and where the agent thinks the

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Speaker 2: property will sit within that price guide. So it is

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Speaker 2: incredibly helpful and easy. In Victoria, everybody can find out

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Speaker 2: the price of a property. Now in Queensland, for example,

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Speaker 2: they cannot publish the price of that property. So basically

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Speaker 2: the concern there is, I guess the idea behind it

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Speaker 2: is that it's going to be sort of misleading potentially agents.

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Speaker 2: You know, you can sort of look at underquoting, over

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Speaker 2: quoting and all those sort of things. So basically to

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Speaker 2: get that price guide, you need to basically speak to

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Speaker 2: the agent to yourself if your interest in the property,

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Speaker 2: and go and view the property and speak with the

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Speaker 2: agent it's similar in New South Wales. However, at least

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Speaker 2: in New South Wales you can say of the agent

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Speaker 2: you know, you can email them and contact them and

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Speaker 2: say what is it and they'll advise what it is.

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Speaker 2: But we have a complete disconnect around the country and

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Speaker 2: a lack of transparency really in all states except Victoria

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Speaker 2: when it comes to giving consumers potential buyers the right

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Speaker 2: to know what a property is likely to sell for.

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Speaker 1: Is there a common thread that kind of links the

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Speaker 1: properties that have not got a price listed? Are they

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Speaker 1: typically kind of your higher end properties. Are they ones

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Speaker 1: where the sellers might be kind of concerned about their privacy?

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Speaker 1: Are they properties that have got something unique about them

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Speaker 1: and therefore it's going to if they have a price

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Speaker 1: guide on there, it is going to look completely at

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Speaker 1: odds with everything else in the neighborhood because this property

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Speaker 1: might be kind of zoned for redevelopment or something along

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Speaker 1: those lines. Are these the kind of reasons why a

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Speaker 1: price guide might be left off a listing in the

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Speaker 1: states in which it is.

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Speaker 2: Allowed, well, more often than not there's a legal requirement

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Speaker 2: around it. But I do have to say I think

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Speaker 2: houses that are at the very pointy end of the market,

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Speaker 2: those very ultra prestige times often will be quite unashamed

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Speaker 2: in what their price is, and when they can, they

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Speaker 2: are more willing to put that price. In my experience,

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Speaker 2: it's pretty much the same for the other end of

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Speaker 2: the market, the more affordable end of the market. I

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Speaker 2: actually think the tricky bit comes in that middle bit

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Speaker 2: where you've got sort of more average price houses for

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Speaker 2: more average price properties. And I think a lot of

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Speaker 2: it is around the idea that a seller doesn't want

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Speaker 2: to reveal what their property might be worth. I want

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Speaker 2: that privacy, but I also think ultimately it's the agent

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Speaker 2: who is really preferring to have an inquiry from a

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Speaker 2: member of the public, a consumer, to ask what that

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Speaker 2: property is likely to sell for. And then the reason

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Speaker 2: they want that is because they want that information. They

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Speaker 2: want to also potentially have that buy, cultivate that buy,

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Speaker 2: encourage that buyer to come through, understand what that buy

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Speaker 2: is looking for. That that way, if that property is

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Speaker 2: not appropriate, they might be able to put them onto

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Speaker 2: the next property. So it's within their interest. I suppose

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Speaker 2: one could say for the agents to build that relationship

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Speaker 2: with who might be a potential buyer.

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Speaker 1: So I think I'm struggling to get my head around

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Speaker 1: some of these motivations, because in a way, you would

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Speaker 1: think that it could potentially make the pull of potential

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Speaker 1: buyers bigger because it might catch a whole lot of

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Speaker 1: other people who are searching and because they're not excluding

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Speaker 1: properties based on a particular price range, and they might

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Speaker 1: suddenly be almost led to believe that they can afford

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Speaker 1: something that they potentially can't. So it gets more people

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Speaker 1: along to an oxtion and more people along to an

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Speaker 1: open home. The flip side to that, I suppose, is

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Speaker 1: that it could also make the pull smaller because there

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Speaker 1: isn't a price guide. Therefore, as a buyer, you assume

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Speaker 1: that it is going to be expensive, or there is

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Speaker 1: something unusual about the property that it's outside of your

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Speaker 1: own what you can afford. I suppose then the agent

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Speaker 1: is getting rid of those people who are not serious

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Speaker 1: about it, and they are really kind of getting the

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Speaker 1: one who might actually make a bid on auction day.

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Speaker 2: Yeah, I think you've answered the question yourself there and

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Speaker 2: that that's what they're ultimately doing. That they're sort of

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Speaker 2: sifting out people because really what they want is the

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Speaker 2: more qualified by because more often than not. If that

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Speaker 2: property doesn't work for them for whatever reason, they probably

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Speaker 2: have another one on their books that they can then

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Speaker 2: show them to. So what they're trying to do is

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Speaker 2: sort of filter them out. But I guess also it

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Speaker 2: is this idea. I think that you know, I think

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Speaker 2: every probably seller goes in with that idea that maybe

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Speaker 2: just maybe with that person, and who makes a killing

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Speaker 2: out of this sale. I'll be that person who someone

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Speaker 2: walks in and just says, oh my gosh, makes an

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Speaker 2: offer that completely blows everything else out of the water,

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Speaker 2: and they go and live in a very wealthy life

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Speaker 2: happily ever after.

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Speaker 1: Oh the dream I reckon that is a dream that

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Speaker 1: every single person who has ever sold a house has

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Speaker 1: felt that at one point.

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Speaker 2: Completely, and we allow ourselves to think that because it

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Speaker 2: does happen like it does happen. I think that is

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Speaker 2: a testament to the strength of Austraia's property market, that

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Speaker 2: people have made huge amounts of money in property over

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Speaker 2: the years. It's just it's the reality of the market

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Speaker 2: that we're in. It doesn't always happen, but it does happen,

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Speaker 2: and people are sort of banking on that and hoping

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Speaker 2: for that. I do have to say that we know

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Speaker 2: that when a listing has a price on it, it

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Speaker 2: attracts a lot more interest from it because it has

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Speaker 2: that price, because it stops people and they're like, oh,

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Speaker 2: I could afford that, or or else they say, what

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Speaker 2: how on earth that picture attached to that property? You'd

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Speaker 2: be worth that? So you've got a few different things here.

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Speaker 2: But I think if you want to generate interest, there

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Speaker 2: is no doubt that having a price attached to it

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Speaker 2: is certainly sort of quite a titillating for a lot

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Speaker 2: of people out there.

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Speaker 1: Yeah, because otherwise it does feel as though you are

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Speaker 1: cutting off a fairly substantial part of the potential market.

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Speaker 2: Well, you're effectively you're effectively flying blind in that you

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Speaker 2: just don't know, I mean, other than the fact if

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Speaker 2: they're listening to us or the time Michael, that we're

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Speaker 2: hopefully having people who are looking at property becoming educated

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Speaker 2: and cultivated into the art of understanding the value of

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Speaker 2: a property, you know, like that that is the actual

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Speaker 2: ideal state that I genuinely feel people who are in

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Speaker 2: the property space and in the market should be that

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Speaker 2: they can almost sort of estimate themselves what that property

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Speaker 2: price is. But I'm not trying to suggest this is

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Speaker 2: a test. However, that is the ideal state for us

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Speaker 2: to be, and that we're not reliant even on the

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Speaker 2: agent saying that, because of course that then leads to

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Speaker 2: the idea of under quoting in that.

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Speaker 1: And I want to ask you about under quoting in

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Speaker 1: a sec But really the advice then for buyers who

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Speaker 1: find themselves in this position of looking they are out

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Speaker 1: there checking out properties every weekend and they're scrolling through

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Speaker 1: and they see something where it is priced on application,

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Speaker 1: they should just pick up the phone or they should

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Speaker 1: just send an email, because there's nothing to lose right

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Speaker 1: in actually asking that question and the agent will answer

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Speaker 1: and tell you right correct.

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Speaker 2: You just literally you step through your hit text agent,

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Speaker 2: call agent, whatever you want to do, whatever you do it,

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Speaker 2: or go to the open for inspection, ask is iball

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Speaker 2: the agent and ask for yourself. You lose nothing if

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Speaker 2: you're concerned that the agent's going to bother you afterwards

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Speaker 2: that you don't want any Obviously, it's completely within your

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Speaker 2: rights to say don't contact me again. You know, all

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Speaker 2: you're getting is trying to understand that information, which you're

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Speaker 2: entitled to do. And you're also entitled to say leave

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Speaker 2: me alone now.

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Speaker 1: Or you give them a fake number. Yeah, it's probably

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Speaker 1: not actually good advice. It's also interesting, isn't it. And

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Speaker 1: I've been to a lot of auctions and open for

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Speaker 1: inspections in New South Wales and if you go on

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Speaker 1: the first weekend, the agent is asking everybody who comes

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Speaker 1: through the house what do you think it's worth? And

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Speaker 1: then all of a sudden, then the following week the

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Speaker 1: price guide pops up and you're like, okay, all right.

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Speaker 1: It feels almost as though a strategy would be to

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Speaker 1: wait a week, await two weeks potentially to see what

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Speaker 1: other people are saying and to see kind of what

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Speaker 1: forms that price guide for the agent before you kind

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Speaker 1: of go in there and potentially put yourself on the

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Speaker 1: hook for more than you can afford by volunteering a

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Speaker 1: price which then forms part of the price guide.

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Speaker 2: That's correct, but I think also consumer affairs will watch

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Speaker 2: properties and across the country they're beginning to apparently crack

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Speaker 2: down on this more. They're often considered a bit of

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Speaker 2: a toothless tiger in this space. The idea that people

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Speaker 2: aren't really sort of agents, aren't really properly reprimanded when

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Speaker 2: they are under quoting. But the idea is also that

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Speaker 2: a price guide should be updated as the level of

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Speaker 2: interest in a property and as if price expectations go

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Speaker 2: up or down during a campaign. So I might put

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Speaker 2: my house on the market. It might be worth one

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Speaker 2: point two million today, there might be an unprecedented amount

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Speaker 2: of buyer interest in my property for whatever reason there

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Speaker 2: might be in a hot demand a family home in

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Speaker 2: a great school zone, for example. At that point, then

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Speaker 2: the agent then has the responsibility to update that price

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Speaker 2: guide throughout the campaign, understanding there is decent and very

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Speaker 2: qualified interest in the property and therefore it's likely to

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Speaker 2: go the reserve will be likely set for a higher

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Speaker 2: price than what they were originally quoting, and.

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Speaker 1: So they should be providing those updates to potential buyers

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Speaker 1: right up until the point at which the property is

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Speaker 1: going to auction exactly.

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Speaker 2: And it's another reason, there's another sort of I guess

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Speaker 2: suggestion about why it is important to have that rapport

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Speaker 2: or a semi relationship with that agent, because if you're

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Speaker 2: not aware of this, whether the price goes up or down,

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Speaker 2: you won't be informed of that. So again, and if

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Speaker 2: anyone fels uncomfortable about an agent encroaching on them. You

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Speaker 2: just have to say, tell me what it is. That's

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Speaker 2: all I wanted to know. Thank you, goodbye. You know,

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Speaker 2: there's absolutely no issue with that, but there is a

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Speaker 2: real benefit to staying abreast of what is happening during

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Speaker 2: the campaign.

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Speaker 1: And so this is where then this is where under

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Speaker 1: quoting comes into it. Where you were saying there that

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Speaker 1: where that price guide is not being updated despite the

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Speaker 1: fact that there is this demand and there is actual

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Speaker 1: genuine interest, And so is that technically what underquoting is

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Speaker 1: then that you have a bunch of people going into

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Speaker 1: the auction, all expecting the price to be or the

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Speaker 1: reserve even to be around the price guide that had

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Speaker 1: previously been quoted, but it hadn't actually been updated. Is

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Speaker 1: that what we're talking about when we hear about underquoting,

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Speaker 1: because every person has a story about under quoting, but

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Speaker 1: a lot of it is actually just kind of perhaps

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Speaker 1: an earlier price guide that was updated closer to the

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Speaker 1: to the auction.

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Speaker 2: Well, I think it's both. I think it's that, but

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Speaker 2: I also do think there are some bad eggs out

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Speaker 2: there that are genuinely under quoting in a bid to

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Speaker 2: get more people turn up at auction. You know that

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Speaker 2: idea of quote a low watch it go, quote at high,

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Speaker 2: watch it die.

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Speaker 1: That's a great saying, isn't it Like it's just oh god,

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Speaker 1: it sums it up perfectly, doesn't it that?

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Speaker 2: It really does? And that's so they're generating interest in

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Speaker 2: the property. Look, the other thing is is that in

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Speaker 2: Victoria the reserve is set but ultimately set by the vendor.

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Speaker 2: Now the vendor can change that reserve, so that there

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Speaker 2: is a lot of the legal side of this. An

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Speaker 2: agent can actually, you know, reasonably justify how this actually

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Speaker 2: can happen because also buyers. The agent could say, well,

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Speaker 2: buyers aren't being transparent and what they're willing to pay

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Speaker 2: for this property. To me, I had no idea Michael

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Speaker 2: Thompson was going to turn up and offer me ten

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Speaker 2: million dollars with his property. How was I to know?

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Speaker 2: And if you, as a buyer keeping that close to

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Speaker 2: your chest, the agent doesn't know that, that will be

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Speaker 2: the argument you get back. But that's Realistically, they should

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Speaker 2: be looking at data points around them. They should be

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Speaker 2: having their finger on the pulse of the market, and

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Speaker 2: so should the people bidding that more often than not,

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Speaker 2: you've got a reasonable idea of where it will go.

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Speaker 2: But there is no doubt that under quoting happens, and

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Speaker 2: really it happens because the consequences of it at this

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Speaker 2: point in time are not severe enough to stop people

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Speaker 2: doing it.

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Speaker 1: So really, in the end, this all just boils down

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Speaker 1: to transparency, doesn't it, and maintaining a relationship with an

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Speaker 1: agent in order to make sure that you're getting the

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Speaker 1: up to date price guides, that you're getting all of

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Speaker 1: the feedback. So that and again going back to what

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Speaker 1: we've talked about in previous episodes, it is about taking

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Speaker 1: as much information as you possibly can into the auction

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Speaker 1: or into any kind of negotiations over the price, and

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Speaker 1: that includes how much interest there is from other buyers

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Speaker 1: and what the realistic expectations for the price is going

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Speaker 1: to be.

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Speaker 2: Yes, And I would also say that anyone who comes

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Speaker 2: across what they believe is under quoting to ensure they

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Speaker 2: report it. Now. I noticed this is a pain to do,

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Speaker 2: but if consumer affairs aren't alerted about under quoting, they've

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Speaker 2: got no pressure on them to change the laws around it.

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Speaker 2: Because there does have to be more accountability on agents

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Speaker 2: with a responsibility to quote honestly and accurately. And I

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Speaker 2: also think in my ideal utopian world, vendors would have

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Speaker 2: to list prices on listings. Yeah like that, that is

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Speaker 2: clear to me. You know, you go into a store here,

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Speaker 2: we don't barter about how much I'll pay for that

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Speaker 2: leisure of milkcre you know that packet of biscuits, and

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Speaker 2: I think.

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Speaker 1: You don't have the person on the checkout going how

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Speaker 1: much do you think it's worth?

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Speaker 2: But I genuinely would love to see this take place

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Speaker 2: in Australia where every property on the market has the vendors'

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Speaker 2: expectations of what they would like to sell with the

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Speaker 2: property for maybe it has the agent's guide of what

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Speaker 2: it could go for. And that's not to say, pep,

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Speaker 2: we're going to have to pay it, but at least

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Speaker 2: we all just go in with our eyes wide open

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Speaker 2: to the situation.

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Speaker 1: And then you just end up in that kind of

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Speaker 1: traditional space potentially of an auction, and then everyone has

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Speaker 1: the same information, everyone has access to that, and if

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Speaker 1: all of a sudden that that price guide gets blown

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Speaker 1: out of the water, it's not because anything has been

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Speaker 1: concealed along the way. It is just competition and it

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Speaker 1: is demand.

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Speaker 2: In the same way that we buy a car in

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Speaker 2: that way. So look, let's keep our fingers crossed that

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Speaker 2: one day our country evolves to that point, because I

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Speaker 2: think I think the more transparency and power that buys

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Speaker 2: and sellers have the better.

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Speaker 1: I think you've sold me on it, and I will

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Speaker 1: stop giving fake numbers to real estate agents. I will

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Speaker 1: invite the conversation because it will keep me informed along

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Speaker 1: the way, and I'll probably the people whose numbers I've

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Speaker 1: been giving will thank me for not doing that anymore.

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Speaker 2: No doubt.

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Speaker 1: All Right, thanks very much, Alice, Thank you, Michael. That

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Speaker 1: was real estate expert Alice Stalts, national property editor at Domain,

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Speaker 1: and I'm Michael Thompson. Make sure you're following the podcast

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Speaker 1: and we'll be back next week with another episode of

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Speaker 1: The Property Pendulum, brought to you by Domain and Fear

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Speaker 1: and Greed, the podcast that tells you which way the

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Speaker 1: property market is going to swing, how to make the

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Speaker 1: most eight